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Think Tank 1010am, Capitalism

Mar 7, 2016|

What is capitalism?  Is America a bastion of capitalism or have we become a hybrid system that combines capitalism and socialism? This hours guest: Dr. David Azerrad - Director of the B. Kenneth Simon Center for Principles & Politics, and an expert on political thought devoting his time to increasing public understanding of America's founding principles @ Heritage Foundation Gary Burtless - Senior Fellow, Economics Studies @The Brookings Institution

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Automatically Generated Transcript (may not be 100% accurate)

Bagged lives were rules still big things get done talking about the spectral session of the legislature. And which religion actually towards the front of soul who's three billion dollar deficit dumping her. Hundred million clothes still lows short of that goal. We'll talk to a couple of expert political analyst Newt pupil. The bones exactly how tall or they're thinking about building that hole ID home attributed touch money or. I'm decode said the mayor Marion had a picture. Talk. Our bread what I thought was a very interesting article by picking new moon on the Wall Street Journal. And basically. We've been thinking about the yeah. Ascension of Kroll a few yeah it should. The expert for trying to figure out and achieve and talked about the five level of agony and read that could be in the lead in the experts were going through. But it comes through the Roland and Donald Trump in chiefs and she thought came down to a couple of words the protected. And the unprotected. Basically it's an argument happened have nots. Led. By a half of leading the have nots against the have. And Gibson interest and talk to introducing conclusions. We're gonna give Peggy Noonan Bo we did get a couple of vote political scientist with the great roads and troops and talk so. That is ten college show is primarily for me that. Nineteen year old daughter and you friends oh and some there room for colleague from Monroe. We're talking about on how we all like Bernie Sanders in the wouldn't vote for. And I said to the democratic socialists. Or what is a socialist. And they had some ideas but they didn't really you know in the courts I didn't column. And totally sure most so. Gogel impresario pulled the boards the Atlantic or do it's article says Bernie is not a socialist and America. Is not capitalistic. And to do it gets from people that know that understand socialism and capitalism. Because it's something a little confused on where doctor David rod with the here's director of the big contests on an incentive for prince won politics Arab bird and political plot. Devoting a lot of his time under increasing public understanding of Americans founding principles. It would be Heritage Foundation. A David welcomed sure appreciate the call. So give me an idea what is a democratic socialist and in America really. An example of capitalist. So the good news with a democratic socialists is that they're much more committed to democracy and the socialism. You know Bernie Sanders is a law abiding elected representatives. Who's now running for constitutional office. He's not revolutionary leader who's trying to overthrow the government and pave the way. For communism. Nor the interest it and having the government control the means of productions so traditionally speaking socialism according to Lennon is that intermediary stage between capitalism and communism. Where the government takes over the means of production control all the companies to what we have with Amtrak would be an example socialism. That's not what the left is calling for. What democratic socialism really seems to mean and the founders variety I did you repeat. Basically more entitlements. So right now in the US we take care of the elderly about 40% of the budget goes to take care of the elderly the social security and Medicare. About 20% of the budget goes to take care of the poor. What is left now is every one in the middle so kind of the middle class people or neither for nor elderly. In Europe they have much more generous benefits for these people free daycare paid leave health care free college. Free transportation concern areas. And I think this is what the left in America wants to do. So is it this isn't the socialism. That we encountered in the twentieth century during the Cold War. It's basically mainstream liberalism more quote unquote free stuff. For the people. My my father. Came on Tuesday. Very poor Texans. Moved cajun country you blue collar labor. I think it became buys today came back. He was a trial courts and the depression. I think he and my mother would say. So security born what does that really explain it to them the mid same Medicare is that we're exploited to. The mid city Medicaid. What is that we like to all the way down to. Somebody come trial can pick took part garbage. Rather than those putting it in the pickup truck and taking it. To Milan though I think you would say we're Euro socialists the cup entry now would he be brought. Oh look you know it'll depend on how you define these terms and mean words. Our languages the line and the meaning of things changes over time with for example one of the examples silences. The work artificial used to be a term of phrase in English. It meant that something was done a lot of our. Today it means that it's taken it's not authentic so. I hadn't been you know people or indeed to all these leading meaning of socialism has changed over time. My only point it's just that kind of your original. Lead in his destination no long replied no one in the US is really calling for the government. To control the means of production. What we bill which in essence is perhaps once it is is the government doesn't own these companies. But there are so heavily regulated. That many of them are basically converted into facto public utilities. So does the government controlled health care system in America no we didn't own the insurance companies. But are you free to run the that you know that we don't a free market economy in that sense we're not capitalists. In that sense. We have a private sector that in you read it you reasons. Have you league regulated for the common good 2% beat companies from polluting the environment and taking advantage of the American people. What ends up happening in practice is yes there are some of that but then there's rampant cronyism. There's basically be business being in bed with big government. And reading the rules of the game in their favor to squash the competition to squash the small guys to prevent new commerce from entering into markets. So we've got its hybrid kind of ugly economy which a lot of collusion between big business and big government. It's high heights I think we have more cronyism and we have either socialism or capitalism. Lab started to read something called the economic freedom of the world index. And they break the world's economy and Libre and call and call him as the world free of and moves them credit economy. Since 1977. And they bring the United States six feet. Who were buying New Zealand Switzerland Ireland 300 agree broad knowledge for eagle on above there. Does that indicate when we see. Boom we thinking when we use the parade. We're capitalistic. Society. Does that mean we're really not were were hi amber. Yes we have been declining economic freedom over the years. I'm not crazy about the term capitalism because it comes from marks and. I think that the founders didn't speak of capitalism Hubble and didn't say I'm counting it capitalistic republic. They spoke of a commercial republic of property rights. Are in free market. My interviewees. I prefer to speak of free market we have a free economy and yet you would be an economy in which the people are free to by cell exchange the labor. Services. And to allow markets to determine prices the government obviously has a role to play. In that providing the legal regulatory framework that allows markets to operate. But you want to allow as much as possible. To have economic freedom. And every year that passes by we have less and less than that in the US and I I think the term capitalism. Many negative connotations. I think for young people they think it means I read it means you know allowing the bigs to take advantage of the people. I think what we should be aiming for is economic freedom and I think that's a more positive term that appeals more to people and we can make the case forcefully got way. Aren't the Olympic break your blog called right back and of facial merger saying the the the question will be. Do we have the economic freedom on a U globes serve he. Your website says 43%. Responded under the age of thirty have. Very favorable view of socialism. Only 32%. Have a favorable view of capital that. So import your neither have we Horry hybrid or even. The label its own words anymore or we country. Yet of economic freedom. Yeah. I doubt that it's been a big question for you but to me you have with the and then burn centers. A nineteen year old daughter. I admire of the younger generation tremendously. Every time I get cheated soon. Makers page and pro level alert talk tomb of the record that to end and they seem to like the concept of of socialism democratic socialism. And I begin to wonder or we still a country because I'm raised. City year or capitalistic country. Or have we become a hybrid of charts and luckily. We've got somebody's school did all the distant given its educated and so saloon where we are doctored they've been as rod. You with The Heritage Foundation. Good. Or bullion economic. Three. Countries still. Compete depends who you could terrorist YouTube comparison to what we used to be. I think we're less freedom we were eat it that you noted that the benchmark should be the following thing. Free markets should be synonym for competition. The more economic freedom you have. The more you should be for people and turn markets and to compete with one another if you happen you like yeah. The less economic freedom you have. The more red tape and obstacles that are going to be someone comes along with the new light. Yeah yeah it will be for the numbers to crush apartment for the taxis to crush Hooper for the blockbusters. To crush Netflix. Capitalism is all about creative destruction this was just that you partners formulation. The creative part is you like yes comes along new products new services better ways of doing things. The destructive. Aspect is the old. Is out blockbuster is finished they were killed by Netflix Netflix one being maybe gone and will be replaced by something else. So the more of this competition you. That the more economic freedoms you have and every one went. The prices of products scored down the prices of services go down the quality goes up it forces people to compete and world literal for it. So if you compared to what we used to do you were less free there's less economic freedom in America. If you compare it to the rest of the world you know I'd rather be here than in Zimbabwe or Egypt or Vietnam. Or in most other countries but it is committed you know there's about a dozen or so countries Hong Kong. Canada that that are more economically freedom we are at least based community geeks in the we can measure these things. So when I read. A report from the world economic war room and they vote this year. Ranking a 140. Countries. Around the world. And there's certainly says capitalism. Is at least supposed to be characterized by low level of regulation. And according to the W via the World Economic Forum in cable news. Young gun it's that you ranks fifth the first place. This year and even blow Sweden at this point. Will win do you look at that and say well. That's buying of the definitions. Of low level regulations. But one of the better met prince would be the beat. The big capitalistic. Destruction of free trade. I can. So to hit it less than the fool you and of regulation then I mean that's clearly one component but that. The nature of. The regulations. You know why do we. Regulations to allow markets to function but would you start to seeing so many at all levels of the economy. Is that the regulations are suffocating markets so let me give you an example and every single state in this country. You've got all of these bogus licensing requirements. That prevent people from exercising very simple profession I'm not talking about brain surgery or piloting a plane where I think it makes sense that the states says hey. You need a license to exercise this profession. But why is it that you need a license to cut here in California. Why is it that you need a license to be an interior designer. In this in the District of Columbia why is it that you need a license to be Clarice I think in Louisiana. Because it's cartel behavior that you step published lurid get together and say hey you realize anybody can come along and start selling flowers. This isn't good for us let's set up a council Flores. Let's put pressure on the government to require a license. And we're gonna win they're going to be if you were florists. We can charge more for flowers and Hulu is of course the consumers lose and of course all the people will be one exercise these simple professions. To the little look at these regulations is Courtney working for are they working for the common good are they keeping the people safer. Or the greasing the wheels of markets to allow for more competition. War already working on behalf of established interest. And making it easier for them to remain top dog and to push away the competition that should be the standard. It is iron argument to being aid. There's never been a country that was early capitalistic does virtually impossible. But wouldn't you practice capitalism. Eventually. You grow into a hybrid of something failed because. Of exactly which are talking about continually. Added regulations. Continually at a government control. So look at this is if you take this 30000 foot view. And you look at America Europe Japan all the developed economies. But all of these countries kind of looked sang I mean they are very important difference you know America has stronger protections for gun rights. As a free your labor market as of last month West Virginia became the 26 state to become right to work. We now have a majority gives states in the union that don't compel you to join a union when you enter the workplace. But if you look at the big picture all of these countries have big government high debt. In title in. Mounds and mounds of red tape. And it does seem to suggest that there the other this common trajectory whether or not it's inevitable. I don't know why I think that the US is in better shape than most other countries in many important regards. But it does suggest that there is kind of almost of a natural tendency. In democracies. For the government to grow which was still feels warnings mean Tocqueville came to America and making 35. When there was no such thing is big government. And he kind of predicted it to a certain degree he felt that there was something in the nature of democracies that would lead to the state growing and growing. Final question if we would labeled with country today. What do we call alert so capitalistic. Hybrid capitalism. Hybrid so true capitalism. Look I. At the level of you read. And it is I think a less interesting question that as a practical question you mentioned your daughter and young people. I would use to think of the term is as addressed to that. I'd I think capitalism two of them had very negative connotation it evokes the financial crisis of 2000. And I think socialism that's positive connotation they know nothing of the Cold War they've never heard of east Germany they think it means we take care of one another. So I would make the argument that in America we should have free market. I would tell them we have a lot of cronyism. At bat to bat because it's the government picking winners and losers preventing the little guy. From trying to to to make it. And I would tell that this decision is absolutely compatible with the safety net where we take care of people who cannot take care of themselves. But we should be pushing the ideal of free markets of a free economy I I think the work capitalism is tainted with his generation. And we should teach them about cronyism. To tell them you know that socialism you know about capitalism do you know about cronyism. Do you know about big big business loving big government and the two of them working together to crush the competition. That's wrong I would bring up over which this generation absolutely love. And tell them how did that come about. Because. We managed to sidestep the problems of the cartels that were created by the taxis and the government. So I'd push free market. Opposed cronyism and make clear that his vision is compatible with a safety net. They've been there early and you'll be columns are usually learn something. Hopefully we get a true back again we spend over looms on the court should thank you have a good day. Much for coming right back what do you think we capitalist or socialist that Gore's something. I don't think anybody bigger friend to do younger generations and your mind. Joint operations crews schism of them and I don't regret. I think they were going to have to be the innovators the B re wars. That my Auburn mothers feel relief from boats. They came out of the year. Depression without marked in the review room the rule I think my generation. Has matched up now so march of the new generation world. And I think a lot of what they go and do it was going to be you all and dim in particular moment comes and vision. And creativity. So I've when I talk to my nineteen year old daughter her Peru and when your speeches young people. And I have been saying that like Bernie says under they like the idea of democratic socialist. But I have been pulled up they argue girth survey you're golden survey. That have 43%. Of the respondents under the age have a favorable view of socialism. And only 32%. Of the favorable view of capitalism. And when my daughter for an said to me bull and what what are your department capitalism. What are you department socialism. I've owned it but I give him quote can answer good as usual we tried doomed thing and that just proved what they ink. I looked it up and in my observed world and I got it it would depend of the league's all along the surface. Feels like we were. A mixture. Aka the there's room. Yeah and economic forum at a meeting of hundred importing countries. In here warned of the conclusions of the east and economic freedom and America. Has been declining actual per accepted as. That dude I would point the citadel of capitalism. Is an element predicts the economy. And what's the government and Brees whose favors in imposes restrictions. With no clear or consistent principled and as always we Gordon via experts is suitable broad thinking is involved in the league luckily. We've got to O Gary Burtless senior pro economic studied with the Brookings institute Gary thank you for joining us right here. So being here or we have this country your William mix. Economy sure we'd democratic socialists. Well. Well the old days that we economists and our company and political science what it's that capitalism is an economic system in which individuals families or private shareholders. Although all are almost all of the means of production. I'm talking about farms and factories where road track utility wires. Power plants tell transmission towers stores department as a homes. Socialism is economic and estimate which to stage toward the people collectively. Own the means of production that I just mentioned now. Obviously we have a good system. Under those got connections at least a little bit in some communities in the United States. Power plant vocal power plant is old. By the municipality. The post opposites certainly collectively owned its own by everybody in the United States. In New York State. Well the state built the Erie Canal and it still ear canal and all of the successor canals in the state. The roads are certainly socialist in the sense that they're collectively own. The British government at one time owned all the steel mills in the country and it's still owns much of healthcare system in in Great Britain. So that's what people think Britain has socialist medicine. But I think a lot of people probably including your daughter. Nowadays. Have a more expansive definition of what socialism has. They regard. Institutions like social security and Medicare and food stamps which remember and that means of production they're only mechanisms to ensure people. Against. And becoming portal page or when they become disabled. And helped pay their doctors' bills there helped speed their families. They think of those institutions is an element to the socialist state. And under that definition in the United States has become. More. Socialist overtime I completely disregard do we disregard the date those people say there were government regulation. Make sure socialist country that to that is complete nonsense. Even purely capitalist countries need government regulation. To enforce the rules of the world we can't have. One. Big companies gobbling up a whole bunch of small once and still maintain a competitive. Capitalist system. And so government managed to. In in force. Devise a regulation of some kind to keep your clean water clean. People working under tremendous so that that are acceptable to. Most voters. You don't. We got a got a good break hold webtalk. And we come back will only continue. Along the ones that cured thinking general so and helps to. The signs of Social Security the size of Medicare this size of medic aid. Or those on social listed institutions. Double rubio common right. Labeled being thrown around these they've politically democratic socialist. Running for the office of the presidency. Others say their run and four and an America that music capitalistic society. We have Gary Burtless with the senior pro economic studies Brookings institute. To help me understand blood. Should we caller zones in the incident on. Gerri I had and rug too when you were in the middle I think very important towards more and more more than for that and a mortar do for immediately. What you believe in this country is the use. Well what I was saying was. If you are expansive than your definition. Socialism. You would include social security and Medicare hand. Medicaid and food stamps themselves on as part of the socialist state. They don't really the means of production. Bigger returns plants. And even before the government had these insurance plans that will be mutual aid societies mutual insurance companies. Mutual. Organizations in the countryside where farmers banded together and creates silos and so forth where they could restore their crops. But if you want to include items like social security and Medicare is part of your definition of what socialist state is that it's certainly the case to the United States has crept toward socialism over the last seven years when these programs were created and have grown to their current times. We spend about I think 850 billion dollars a year on Social Security benefits maybe 550 billion I'm sure. I'm Medicare benefits. I don't think that those elements of socialism in my book because. The government is collecting contributions to a mosque when we work and giving the money back to its. In our day each us that we can doctors' bills or pay for our winter by looters don't think we're still buying food buying the medical services. And so forth from private. Individuals are from private companies so I don't think it's socialism but I think maybe Bernie sanders' status. And observe and would totally blow in this country today. Well I think consensus in 1950s. So a lot of economists have been comfortable calling it commit extra. A mixed system we can't smack elements of socialism that we of overwhelmingly we're still privately owned. Come country we privately owned businesses and means of production homes apartments and so forth. Jerry we're just trying to get him to educators in the old Clinton I'd think it opens up thank you so much of Tuesday. Thank you off by. All right. Come back stay brother's governor a bill brigade severed in them little 53 yeah open. Next we're gonna talk about an article. Journalist Peggy Noonan Walter groom. Wrote an article called trumpet and he brought eyes on the unprotected. One political proposed rules are struggling to make sensible world that they created. Well take a look at it I'm a kid is have thought so certainly. Have not pro forma and a big Q may bond in pursuing and world. Truck pulling Portland didn't see your view Fincher and writer brought own stable of stubborn BO coming up next.